by Ian Mathias: Fortunes
Made, Fortunes Lost
The U.S. Postal
Service is on track for a record $7 billion deficit this year. That’s
more than double last year’s loss.
General John Potter bumped up his previous projection by a billion
bucks yesterday, citing the growing expenses of six-day delivery
and employee retirement/health care plans. Potter and his team are
scrambling to cut costs left and right – from a yearlong hiring
freeze to early retirement offers to branch closures. But we wonder…
will it even matter?
Accountability Office recently labeled the USPS a “high risk”
federal program, and while we’re hard-pressed to think of any
risk-free government program, we’re inclined to agree.
Service is facing a perfect storm of business risk: The business
is already loaded up with debt. Minimum wage and benefit costs are
rising while revenues are plummeting. For example, they are expected
to handle at least 27 million fewer pieces of mail this year than
in 2008. Is there any business in America that isn’t looking
to cut shipping costs? (There’s this new technology we’ve
heard about called “e-mail.”)
UPS and FedEx, two worthy private-sector rivals. And what about
Peak Oil? A summer of 2008 redux could cripple the whole industry.
Above all, the USPS is run by the government… c’mon.
might not be dead, but we suspect the USPS is going the way of Amtrak,
even deliver our mail without losing money, yet the public looks
to the government to manage our health care? Oy…
is managing editor of The
5 Min. Forecast and AgoraFinancial.com.
Since working for Agora Financial, respected media outlets including
Forbes.com, the Associated Press, Yahoo, and MSN Money have syndicated
his writing. He received his BA from Loyola College in Maryland
and is currently studying writing at the graduate level.